Republic v Zachariah & 2 others (Anti-Corruption Case 35 of 2011) [2020] KEMC 11 (KLR)
The bottom line
#A Kenyan court convicted a contractor and its company of faking an arbitration award to try to claim nearly Kshs 300 million from government.
What this practically means
#Executive summary
#Key legal issues
#Making a false document (Count I)
The arbitration award P. exhibit 2 used in court was not the genuine award of Engineer Joseph Theophil Thuo; it was falsified to introduce Kshs. 97,176,206, and the 1st accused, as the active insider, was its perpetrator
Prosecution witnesses who participated in the arbitration confirmed that the compensating-events claim of Kshs. 97,176,206 never featured before the arbitrator. The arbitrator's secretary disowned both the signature and typing of the disputed document, and the forensic document examiner found the signatures on P. exhibit 2 to be forgeries, differing in font, format, numbering and content from the genuine award. As the accused drove the arbitration and enforcement processes, the court inferred dishonesty and that he falsified the award for a fraudulent purpose.
Uttering a false document (Count II)
Both the 1st accused and Binlaw Construction Company Limited knowingly and fraudulently uttered the false award by filing it in Misc. Civil Application No. 237 of 2009 to obtain a decree
The accused did not deny filing the enforcement application and relying on the false award; his signatures on the supporting and verifying affidavits were confirmed by the document examiner. Having fully participated in the arbitration, he knew the true findings of the arbitrator and was deliberately bent on deceiving the court. Since the crimes were committed for the direct benefit of the company, the company was criminally culpable too.
Attempt to commit a corruption offence (Count III)
The attempt to obtain Kshs. 294,443,904 by falsely pretending the doctored award was valid was proved beyond reasonable doubt against the 1st and 3rd accused
The accused did not stop at demanding payment from the Permanent Secretary; he filed enforcement and judicial review proceedings to compel payment. The Attorney General's Office was initially persuaded to press for settlement before KACC investigators unearthed the fraud. The court held the scheme was only stopped by the intervening discovery of the falsified award, completing the actus reus of attempt.
Corporate liability of directors
Only the 1st accused, the managing director who signed all the documents and drove the process, bore liability; other directors had no evidenced involvement
Applying section 23 of the Penal Code, the court held that directors cannot be liable by status alone and must either have known of the offence or failed to take reasonable steps to prevent it. Investigation revealed no correspondence or board resolution implicating other directors. The discrimination argument therefore lacked merit.
Legal principles established
#- Officers and directors are not criminally culpable for a company's offence by status alone; they may be exonerated where unaware of the offence
- To prove uttering a false document, the prosecution must establish that the document is false, that the accused knew of its falsity, and that he uttered it fraudulently
- Uttering a document is not restricted to physical presentation; it encompasses using or dealing with the document so as to induce another to act upon it
- An attempt is committed where the perpetrator has set in motion the steps towards commission of the offence but is stopped by an intervening circumstance
Court orders
#- 1.Conviction of the 1st accused, John Moguche Zachariah, on Count I (making a false document contrary to section 345 as read with sections 347(b) and 349 of the Penal Code) under section 215 of the Criminal Procedure Code
- 2.Conviction of both the 1st and 3rd accused on Count II (uttering a false document contrary to section 353 of the Penal Code) under section 215 of the Criminal Procedure Code
- 3.Conviction of both the 1st and 3rd accused on Count III (attempt to commit a corruption offence contrary to section 47A(1) of the Anti-Corruption and Economic Crimes Act) under section 215 of the Criminal Procedure Code
- 4.Acquittal of the 2nd accused, Thomas Moturi Oyunge, under section 210 of the Criminal Procedure Code for no prima facie case (at the case-to-answer stage)
- Jurisdiction invoked
- Original criminal jurisdiction over charges under the Penal Code (Cap 63) and the Anti-Corruption and Economic Crimes Act, No. 3 of 2003 (specific statutory provision not stated)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Republic v Zachariah & 2 others (Anti-Corruption Case 35 of 2011) [2020] KEMC 11 (KLR)", Case Analysis (2020). Nairobi Chief Magistrate's Anti-Corruption Criminal Case (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2020/11/eng@2020-10-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.